earning money at end of lease

[Wrangler847]

If my residual value is 81 percent on 39 month lease is it safe to say I can get money back at the end of my lease?msrp sticker was 40k and final negotiated total was 40k after taxes and fees. Residual value says 32k on paper work

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[Ababy23]

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[Some Random Guy]

Are you referring to buying it at the end of the lease then trying to “flip” it? I’ve heard of lease credit but never seen it in action. Maybe if you plan to lease another and can “roll over” some value with the same bank/manufacturer combo.

 

[aldo98229]

You can also buy the Jeep for the stated balance, turn around, resell it and pocket the leftover “equity.”

 

[Chupacabra]

You can also buy the Jeep for the stated balance, turn around, resell it and pocket the leftover “equity.”

This. Your'e not going to just get a check from FCA at the end of the lease. If the Jeep is really worth more than the residual, plus end of lease fees, etc then that's yours if you sell it, or trade it in (assuming the trade in value is "real" and not inflated and money taken elsewhere).

I have leased a fair number of vehicles in my life, none have ever been worth anywhere near the residual at the end. Some are because the maker uses an artificially high residual to make the lease attractive, others were just bad residuals.

 

[Windshieldfarmer]

For me the problem buying out a lease and then reselling it is sales tax. Where I live I would need to pay sales tax on the buyout...which means I need at least 7.5% more than the residual to break even. That has never worked. More commonly the residual is too high and I’ve turned the vehicle back in.

 

[Jasonep]

I’ve been successful with trading in a vehicle at lease end and getting some of that equity back against the purchase of the new vehicle. Doing it all through the dealer eliminates the tax problem you described.

 

[R3TRO]

I've leased 10 cars over the years and only 1 (Dodge Durango) had positive equity in it after the lease. It was just rolled into my next lease (+$1200).

 

[Rosco P]

I leased my 15 JKURHR. I traded it in a little less than a year early. The trade value was $5k more than my remaining lease costs. I wasn't going to go through the hassle of buying it and selling it or risk getting nothing at the end of the lease.

I am currently leasing my 19 JLUR and am in a good position now. Less so, but I can get some value out of trading.

 

[ThirtyOne]

Yeah you are better off trading than buying out and selling due to taxes. But yes you can have equity at the end of a lease on a Wrangler. That's why all things being equal on a Wrangler lease a lower residual is better.

 

[Chupacabra]

Yeah you are better off trading than buying out and selling due to taxes. But yes you can have equity at the end of a lease on a Wrangler. That's why all things being equal on a Wrangler lease a lower residual is better.

A lower residual just means a higher lease payment. It all works out in the end...

 

[Windshieldfarmer]

I’ve been successful with trading in a vehicle at lease end and getting some of that equity back against the purchase of the new vehicle. Doing it all through the dealer eliminates the tax problem you described.

Depends on state law - I live in a state where that is prohibited. The tax man gets his cut....grrrr

 

[ThirtyOne]

A lower residual just means a higher lease payment. It all works out in the end...

Not necessarily. There are 3 banks that dealers use for leasing. One of them, Ally, tends to pair higher money factors with higher residuals. USBank, for example, tends to pair lower money factors and lower residuals. The payments can be very similar.

it's important to do your homework.

 

[hybrid3.0]

When you lease you only pay sales tax on the portion of the lease. Simple example if you lease a $45k Jeep that has a $30k residual after three years and you have a sales tax of 7%, you pay $15k*0.07 = $1,050 rolled into your lease payments. If you were to buy the vehicle outright, you would pay $45k*0.07 = $3,150. If you sell your Jeep in 3 years, you would have paid an additional $2k of sales tax vs. leasing. A buyer would need to keep his Jeep for nine+ years to break even on taxes compared to the lease. Most vehicles are closer on average to a 50% residual rate after three years so in this case the lease tax would be $1,575 which means you break even on sales tax after six years.

 

[TheRaven]

Not necessarily. There are 3 banks that dealers use for leasing. One of them, Ally, tends to pair higher money factors with higher residuals. USBank, for example, tends to pair lower money factors and lower residuals. The payments can be very similar.

Neither of the above will allow you to trade or sell your lease, either. With Ally and USBank, you have only two choices - buy it out yourself, or turn it in to the bank.

Never lease with these banks, always use the captive bank (like Chrysler Capital for instance).

If your lease is with CCAP, you can take it to any dealer and get a trade offer, or you can use Carvana or Vroom online. With a Wrangler, especially right now, you are pretty much guaranteed to have several thousand in "equity".

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